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Sunday 31 July 2016

Commodity - Trading

How can I open a commodity trading account?
Account opening for trading in commodities are somewhat easy rather than opening for an equity account. KYC is mandatory but D-mat account is not required for those who do not intend to take delivery.
What are the trade timings of commodity exchanges?
MCX – Monday to Friday 10:00AM-23:55PM
NMCE – Monday to Friday 10:00AM- 10:00PM
NCDEX –Monday to Friday 10:00AM-23:30PM
How much I have to invest initially for trading?
You can have an amount as low as Rs 1,000. All you need is money for margins payable upfront to exchanges through brokers. The margins range from 4-10 per cent of the value of the commodity contract.
Is there any service tax applicable in commodity trading? What is its percentage?
Yes, as per the Union Budget 2015, service tax @ 14% is applicable.
Whether d-mat account is needed for commodities trading?
Demat account is not mandatory for trading, however commodity Demat account is mandatory for all delivery based transactions.
Can one do trading in commodity by himself?
Yes. There are lots of broking firms providing online trading platforms nowadays.
What are the various major commodity exchanges in India?
Multi commodity Exchange
National Commodities & Derivatives exchange
National Multi Commodity Exchange
Who is the controlling body of exchanges in India?
In India, commodity futures trading India is regulated by Forward Market Commission (FMC) which falls under SEBI.
What are the various commodities available for trading?
In India, there are about 50 major commodities available for trading in different exchanges. It is segmented as Precious metals, Energy, base metals and agriculture commodities.
What will happen if I failed to close my position on its expiry date?
If a trader or an investor fails to close his/her position on its expiry date, depending on the long/short position, he/she has to take or give delivery of the underlying commodity. If he/she is not willing to take the delivery, then a penalty has to be paid in case of Sellers Right contract based on the final settlement price.
What are the various charges included in trading?
Broking charges are the main cost while trading in commodities. Apart from that exchange levy, delivery charges, commodity transaction charges (only for non agri commodities) are the other charges.
What is a stop loss?
A stop loss is an order to buy (or sell) a commodity once the price of the commodity climbed above (or fall below) a specified stop price. When the specified stop price is reached, the stop order is entered as a market order (no limit) or a limit order (fixed or pre-determined price).
What is trigger price?
Trigger price is where a Buy/Sell gets executed.


Parag Patil is a technical analyst and trading system designer with stock excel programmer. I hope the articles and live chart of nse future and mcx on this Website will be as helpful and profitable to you . I try to update and post new articles tips everyday. My motto is to encourage the traders, so that they should able to understand the technique views behind the moment of stocks. I have deeply analyzed with many technical indicator with parameter and added to my amibroker afl. And even taken backtest report which is never being implemented. Any of the analyst expect me. Seeing all this you may understand that my views is more technical than commercial. If you are profited by my views I fill happy.

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